Lecture: Food Safety in a Global Supply Chain

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Lecture:

Food Safety in a Global Supply Chain

Mary Helander, Ph.D. • IBM T. J. Watson Research Center • Business Analytics and Mathematical Sciences

Fall 2009 Operations Research/ Management Science Seminar Series Friday, September 18, 2009 • 11:00 am – 12:00 pm

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Lecture Outline

Current Issues in Food Safety

Food Safety in the Context of Supply Chain Risk Management Food Safety and the Role of Digital Media and Social Networking Wrap Up

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Introduction

:

Recent food contaminations and recalls erode consumer trust, change

consumer perceptions and impact purchasing behaviors

Lettuce E. Coli Chicken Bird Flu Cantaloupe Salmonella Chicken Listeria Mushrooms E. Coli Chocolate Salmonella

Rice GMO Diethylene GlycolToothpaste

Dog treats Melamine Snack food Salmonella Gr. Beef E. Coli Cantaloupe Salmonella Tomatoes> Jalapeños Salmonella Toys Lead

> 42% of consumers buy different brands today versus 2 years ago … because they are looking for safer products

> 47% are more concerned today about food safety than they were 2 years ago

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Some recognized contaminants that threaten food safety

§ Bacterial pathogens (e.g. E coli, Salmonella, Clostridium Botulinum)

§ Viral pathogens

§ Mycotoxins

§ Allergens and allergen cross-contact

§ Protein Boosters (e.g. melamine)

§ Flavors and off loaders

§ Banned ingredients (e.g. banned dyes)

§ Overdosing of nutrients

§ Pesticides

§ Metals

§ Nonmetal foreign bodies (e.g. glass)

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Background

§ Food Safety – The handling, preparation, and storage of food in ways that prevent food-borne illness (i.e. resulting from the consumption of food). Includes the insurance that food is free of accidental or intentional contaminants that may cause harm.

§ Food Security – The availability of food (as a source of essential nutrition) as well as an individual’s access to it. Examples of threats to food security include nutritional deficiencies, unsafe food, land degradation, plant disease, et cetera as well as certain political and

economic conditions.

§ Food Quality – Characteristics of food that make it acceptable to consumers. These include appearance (size, shape, color, gloss, and consistency), texture, and flavor, as well as other factors such as expected nutritional content.

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Economic Adulteration of Food

Omitting or substitution of an ingredient for financial gain

§

Examples

– Diluting draft beer (i.e. artificially increasing volume, bulk or weight)

– Using food coloring to conceal defects or lack of freshness

§

Historical Perspective

– “Swindled: The Dark History of Food Fraud, from Poisoned Candy to

Counterfeit Coffee,” by Bee Wilson, Princeton University Press, 2008

– Correlates attention to food safety with the rise of chemistry applied in

everyday life

– Recent attention to food safety also coincides with a rise of technologies:

• digital media, social networking, and advanced analytics

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Insuring Safety within the Global Food Supply Chain

Existing Practice

§

Regulation, oversight e.g. FDA, USDA

§

Standards e.g. HACCP*

§

Processes such as sterilization,

pasteurization and decontamination

§

Inspection, quality control

§

Packaging

§

Product recall

§

Outbreak tracking

New, Developing Approaches

§

Regulation, oversight e.g. FDA, USDA

§

Advances in Food science

§

Supply chain traceability

§

Advanced risk management analytics

§

Front-Gate Detection and Material

Characterization Technologies

– E.g. Mass Spectroscopy, Remote

Sensing, Imaging Technology

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Hazard Analysis and Critical Control Points (HACCP)

General Principals

§ Conduct hazard analyses

§ Identify critical control points where food safety hazards may occur

§ Establish critical limits for control points (e.g. amount of detectable pesticide on a head of lettuce)

§ Establish control point monitoring

§ Establish corrective actions for events of hazard detection

§ Perform record keeping

§ Validate that the HACCP system is working

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The food industry is a complex, global collective of diverse

businesses that together supply food consumed by the world

population

§ Directly includes businesses that produce, process and deliver food: – Agriculture

– Consumer Products (specifically, food manufacturers) – Transportation (specifically, distribution of the food)

– Retail and Wholesale (i.e. sellers of the food, such as grocers and restaurants)

§ Indirectly includes:

– Government (e.g. regulation, public health, judicial system) – Manufacturing (e.g. farm machinery, seed producers)

– Financial Services (e.g. credit, insurance) – Research and Development (food technology)

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The Tomato / Pepper Scare (2008)

§ An outbreak of salmonella saintpaul was associated with multiple raw produce items in 2008

§ Thought to be related to tomatoes sourced in Mexico

§ Eventually linked to Serrano peppers, also grown in Mexico

§ Point of contamination never determined with 100% certainty

§ Trade bans created unnecessary tension and trust issues between the US and Mexico

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Exercise:

Can a contamination outbreak be considered a “rare event” ??

§ Number of “eaters” in the US as of September 2009: – In the US, ~307 Million

– Source: U.S. Census Bureau, population clock estimate

§ A typical US “eater” over their lifetime: – Consumes ~70K meals

– Consumes ~60 tons of food

– Source: Contemporary Nutrition, 6th Edition, by Gordon Wardlaw and Anne Smith, McGraw Hill, 2007

§ Number of Americans who regularly enjoy Campbell's® Tomato soup – ~25 Million

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Lecture Outline

Current Issues in Food Safety

Food Safety in the Context of Supply Chain Risk Management

Food Safety and the Role of Digital Media and Social Networking Wrap Up

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Advanced supply chains allow the ability to track and trace entities

through a multi-enterprise supply chain. Supply chains for food

present unique challenges

§

Complex networks of trading

partners, including global sourcing

§

Heterogeneous technological

capabilities

§

Non-homogeneous data

§

Non-digital, incomplete, or unreliable

data

§

Disparate data sources

§

Benefits not gained by trading

partners who incur costs

§

Difficult governance

u u v v w w x x y y z { |

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A track and trace system that supports food safety must capture,

structure and integrate data on movements, attribute changes, and

processing activities from across and within the supply chain

Data security maintained via encryption, restricted password access, etc… Example: Beef - Each company maintains its own product information and record of transactions, making that information available on a permission basis to stakeholders

Rapid communication of essential data

Antibiotics

Logistics Logistics

Fertilizers Packaging Ingredients

Logistics

Ingredients

Logistics

Data Data Data Data Data Data

Virtual Traceability System

Logistics Logistics Logistics Logistics Logistics

Grocery Store/ Restaurant Corn Farmer Cattle

Rancher Distribution Center Beef Processor CP Manufacturer Transaction & Historical Data Firewall Firewall Firewall Firewall Firewall Firewall Firewall

Track and trace products and risks within the four walls to isolate and prevent issues

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In system design for safety, the highest priorities are assigned to

hazard prevention

x

Damage MinimizationMinimizationDamage

A hazard event has occurred. Minimize the damage.

Hazard ControlControlHazard

A hazard event has occurred. Mitigate the effects.

Hazard ReductionReductionHazard

Minimize the

probability of future hazard events occurring.

Hazard EliminationEliminationHazard

Complete elimination of the possibility for future hazard events.

PRIORITY

Traceability enables improved reaction to an outbreak

Advanced data analytic methods take large volumes of data from various sources, including from traceability solutions, to enable prediction and avoidance

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Overview of the SCOR-Model

Supply-Chain Operations Reference-Model*

Return

Sell Move & Store Use

Make Source Plan Deliver •Balance resources •Establish communicati on plans •Manage data collection, plan inventory, assets utilization •Align with financial plan •Identify sourcing alternatives •Evaluate suppliers •Schedule and execute procurement and deliveries •Manage inventory, supply network, and •Schedule production activities •Collect data and monitor make processes •Manage supply chain make risk •Sales and marketing •Manage customer fulfillment •Customer invoicing •Manage defeat returns •Recall management •Recycling •Warehouse management •Transportati on management •Handle and store •Consume

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Most food-borne illnesses are caused by contaminations introduced

via improper storage and handling

Return

Sell Move & Store Use

Make Source

Plan Deliver

Decision maker: The consumer; the retailer

Decisions: What to eat; how to store; how to handle

Risk: Food-borne contamination

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Supply chain sourcing is one of the most frequently noted cause of

food contamination

Return

Sell Move & Store Use

Make Source

Plan Deliver

Decision maker: The food manufacturer

Decisions: Suppliers (when alternatives exist) and terms; investment in contamination screening

Risk: Contaminated ingredients from suppliers

Impact: Possible illnesses and death of end consumers; brand impact; financial impact of lawsuits.

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Example: The Melamine Scare in China, 2008

§

A supply chain sourcing risk example

– Several suppliers to milk and infant formulae companies used

melamine as an artificial protein booster (i.e. economic adulteration)

§

Impact

– Melamine combines with Cyanuric Acid to form crystals that

accumulate in the kidneys, which can result in acute renal failure.

Melamine Structure

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Example of Food Supply Chain “Make” Risk

Return

Sell Move & Store Use

Make Source

Plan Deliver

August 2006 -- First cases of Salmonella Tennessee are reported.

August 2006 – A roof leak and fire sprinkler system leak in a Sylvester, GA food plant. These are later blamed as the source of moisture helping salmonella bacteria grow and contaminating

peanut butter product

Feb. 14, 2007 -- The CDC announced that the salmonella outbreak is linked to Peter Pan peanut butter.

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The Peanut Scare (2009)

§

January 2009 – The FDA confirmed

sources of a Salmonella outbreak are

peanut butter and peanut paste

§

Produced by the Peanut Corporation

of America (PCA), Blakely, Georgia

processing plant.

§

Specifically noted were improper

handling, preparation and storage.

§

As of 9PM EDT, Sunday, February 1,

2009, 550 persons infected with the

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Lecture Outline

Current Issues in Food Safety

Food Safety in the Context of Supply Chain Risk Management

Food Safety and the Role of Digital Media and Social Networking

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Food Safety meets Digital Media and Social Networking

§ The internet …

– Is changing the profile of how and when we receive news about local, national and world events

– Is changing the way we view availability and credibility of information – Is changing the pace at which we reflect on and react to events

– May contribute to the magnitude of an event’s impact

– Connects people across the globe / shortens the “average degrees of separation”

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In late Spring of 2009, E Coli 0157:H7 was detected in a global

consumer product company’s pre-packaged cookie dough

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Public sentiment trends based on analysis of information from the

internet showed a spike of activity coinciding with the FDA news

release.

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Almost 50% of internet snippets related to the 2009 cookie dough E

coli outbreak were posted to a site called

www.medhelp.com.

This

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The potential for a disease outbreak alert based search engine data was

observed in November 2008. Google took notice of the flu season arrival

well before the CDC, where patterns indicating outbreaks may not be

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Lecture Outline

Current Issues in Food Safety

Food Safety in the Context of Supply Chain Risk Management Food Safety and the Role of Digital Media and Social Networking

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Burning Questions

§ How can we build more intelligence into food supply chain management?

§ Are we dealing with “rare” (albeit possibly high impact) events?

– How can we effectively estimate occurrence probabilities to support decision making under uncertainty in supply chain risk management?

– How can we predict (and prevent) such events?

– How should limited resources (detection, inspection, regulation and oversight, etc) be used to maximize food safety?

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